Today in Nanjing – March 31st – the G20 have brought together the G20 Finance Ministers and Central Bankers for what is billed as a Seminar on the International Monetary System.  The seminar has been organized by the French President as host of the G20 Leaders Summit scheduled for November in Cannes – and says the press invitation – with close cooperation with the Chinese authorities.

Only one problem – the Chinese do not want to discuss the Chinese policy with respect to the renminbi.  As is evident from commentary and analyses from many finance ministers in the G20, they see China’s renminbi policy as a major element of the global imbalances.  The criticism of the undervaluing of the renminbi is strongly expressed by US officials but it is not limited the traditional advanced countries.  It is also an object of criticism by rising powers including most notably Brazil – see this week’s Feature of the Week by Roberto Luis Troster  at the Munk School Portal entitled, “Brazil’s Currency Strategy Problem“.

The described issue is of two sorts.  The Chinese – and the French Presidency – have pressed for reform of the global monetary system.  Read that as finding a way to end the reserve currency status of the United States dollar.  At best this policy is a long term policy change.

Additionally, the French support the effort to structure a global economic system to reduce volatility in the current global economy – to deal with global imbalances – in other words.  In this discussion most agree that there is a need to move the renminbi from a fixed rate to a market rate currency.  The US has pressed this strongly and to varying degrees many other G20 countries see the undervaluation of the renminbi and the collateral enormous reserves of China as a continuing aspect of that volatility.

So the French continue to push both issues – one favored by China; one favored by the United States.  Such is the complexity of global governance.